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> Actually most billionaires manage to reshuffle their assets I was talking to some people sufficiently wealthy that this is a concern, and their point is that

by rsj_hn 5y ago

> Actually most billionaires manage to reshuffle their assets I was talking to some people sufficiently wealthy that this is a concern, and their point is that the only reason some don't transfer their assets like this is fear of their own children. Unless you really are a farmer, or small business owner, the estate tax is completely optional if you trust your kids. In 2019, there were only 2,570 estate taxes filed. > Almost all mentions of the estate tax in this thread has been generic whining about the fact that there is an estate tax There is also whining among people that they need to spend so much on accountants and lawyers to avoid what is essentially a completely bypassable tax. So you can see how socially it is not a good use of our human capital to create this enormous tax avoidance industry, and how it would be much better to pass laws that didn't need to do things like value privately held businesses or artwork in order to determine your tax liability.

PaulDavisThe1st 5y ago
If there are taxes, there's a tax avoidance industry. I mean, c'mon, there's a gigantic tax avoidance industry just for regular income tax. The proposed law under discussion here explicitly excludes privately held businesses and artwork.
- rsj_hn 5y ago
  > I mean, c'mon, there's a gigantic tax avoidance industry just for regular income tax. Because we have an extremely complex tax code. But seriously, eliminate all corporate taxes and replace that with a 10% VAT. Treat all income the same -- I don't care whether it's a long term capital gain, or a meteor filled with gold crashing into your yard, don't distinguish at all. Put it all into a single bucket, get one number, look that up in a progressive rate table. Pay a percentage. No deductions of any kind for anything. Not for mortgage, not for kids, not for school, not for charity, not for solar panels, etc. But only tax income, not assets. That would eliminate 99% of tax prep work.
  - PaulDavisThe1st 5y ago
    The correct answer in my opinion has nothing to do with corporate taxation. The US government for some reason(s) (for another day) is almost completely unwilling to simply redistribute money to fund things it decides are worthy goals. Instead it creates tax credits and deductions that are supposed to do the same thing (at least for "the worthy"). We need to stop using tax code to implement policy. Taxes should be taxes, and if the government decides to pay people to encourage them to install solar PV/have children/buy new cars/invest in bitcoin/whatever, then the government should send them a check to do so. So we're mostly in violent agreement, except that if corporations have any of the rights of people (and likewise, if people can somehow claim to be corporations), then I want them taxed just like people.
    - rsj_hn 5y ago
      Yeah, I agree on the households. The point about corporate taxes is we have so many loopholes. Historically, nations adopted a VAT because it's great at squashing tax-avoidance, as it encourages snitching. Basically you report you paid someone X, and then they have to pay the VAT instead of you. So it's a very clean and elegant solution to dealing with the problem of corporate accounting and tax avoidance. In terms of treating a corporation the same as a household -- so that it pays taxes on all revenue, the problem is the economic distortions. There are just some businesses - like grocery stores -- that have high turnover and low margins. Other businesses have low turnover and high margins. And the tax code should not really penalize one at the expense of another. E.g. groceries just don't last, they have to be sold quickly. Furniture lasts a while. The reality of that natural difference trumps any appeals to logical symmetry in treating corporations the same as households.
  - thoughtstheseus 5y ago
    We should implement a digital central bank currency and use it to implement a progressive consumption tax. Vats are great.
    - rsj_hn 5y ago
      Corporate profit tax + payroll tax = VAT Except it's super easy to cheat on the left hand side, but hard to cheat on the right. VAT taxes get paid, payroll taxes get mostly paid, but corporate profit taxes - not so much. Unfortunately most progressives don't understand this point and keep thinking that corporate profit taxes are good while VATs are bad, and they are kinda confused about payroll taxes. Then you try to tell them what matters is tax incidence and their heads explode.
kmonsen 5y ago
If you fear your children you could transfer the assets to someone else?

by rsj_hn 5y ago

PaulDavisThe1st 5y ago

If there are taxes, there's a tax avoidance industry. I mean, c'mon, there's a gigantic tax avoidance industry just for regular income tax. The proposed law under discussion here explicitly excludes privately held businesses and artwork.

rsj_hn 5y ago
> I mean, c'mon, there's a gigantic tax avoidance industry just for regular income tax. Because we have an extremely complex tax code. But seriously, eliminate all corporate taxes and replace that with a 10% VAT. Treat all income the same -- I don't care whether it's a long term capital gain, or a meteor filled with gold crashing into your yard, don't distinguish at all. Put it all into a single bucket, get one number, look that up in a progressive rate table. Pay a percentage. No deductions of any kind for anything. Not for mortgage, not for kids, not for school, not for charity, not for solar panels, etc. But only tax income, not assets. That would eliminate 99% of tax prep work.
- PaulDavisThe1st 5y ago
  The correct answer in my opinion has nothing to do with corporate taxation. The US government for some reason(s) (for another day) is almost completely unwilling to simply redistribute money to fund things it decides are worthy goals. Instead it creates tax credits and deductions that are supposed to do the same thing (at least for "the worthy"). We need to stop using tax code to implement policy. Taxes should be taxes, and if the government decides to pay people to encourage them to install solar PV/have children/buy new cars/invest in bitcoin/whatever, then the government should send them a check to do so. So we're mostly in violent agreement, except that if corporations have any of the rights of people (and likewise, if people can somehow claim to be corporations), then I want them taxed just like people.
  - rsj_hn 5y ago
    Yeah, I agree on the households. The point about corporate taxes is we have so many loopholes. Historically, nations adopted a VAT because it's great at squashing tax-avoidance, as it encourages snitching. Basically you report you paid someone X, and then they have to pay the VAT instead of you. So it's a very clean and elegant solution to dealing with the problem of corporate accounting and tax avoidance. In terms of treating a corporation the same as a household -- so that it pays taxes on all revenue, the problem is the economic distortions. There are just some businesses - like grocery stores -- that have high turnover and low margins. Other businesses have low turnover and high margins. And the tax code should not really penalize one at the expense of another. E.g. groceries just don't last, they have to be sold quickly. Furniture lasts a while. The reality of that natural difference trumps any appeals to logical symmetry in treating corporations the same as households.
- thoughtstheseus 5y ago
  We should implement a digital central bank currency and use it to implement a progressive consumption tax. Vats are great.
  - rsj_hn 5y ago
    Corporate profit tax + payroll tax = VAT Except it's super easy to cheat on the left hand side, but hard to cheat on the right. VAT taxes get paid, payroll taxes get mostly paid, but corporate profit taxes - not so much. Unfortunately most progressives don't understand this point and keep thinking that corporate profit taxes are good while VATs are bad, and they are kinda confused about payroll taxes. Then you try to tell them what matters is tax incidence and their heads explode.

kmonsen 5y ago

If you fear your children you could transfer the assets to someone else?